What support is available for business affected by Covid-19?

Christian Mancier, Corporate/Commercial Partner at Stockport law firm, Gorvins Solicitors, outlines what key support is available for businesses, both from government and measures being taken by private businesses, who may be facing pressure and uncertainty as Covid-19 takes its toll on UK businesses.

The position with regard to Covid-19 is a serious concern for everyone but what support is available for business with trade imploding almost overnight for certain sectors?

The Chancellor has announced a raft of measures to help businesses of all shapes and sizes. Whilst this is an ever changing position (with significant additional support being announced at yesterday’s Covid-19 daily briefing) here is a summary of some of the support measures announced by 17^th March 2020 which may be of benefit to you and your business:

1. Any company with less than 250 employees as at the 28^th February 2020 can recover up to 2 weeks’ statutory sick pay (SSP) for each employee who is off work because of Covid-19. Employers will need to maintain appropriate records but employees won’t need to provide a fit note.
2. Banks have been told they need to be sympathetic to business so please discuss any financial concerns with your bank.
3. With a quarter date coming up on the 25^th March, many businesses will be about to pay rent in advance for the following quarter. It is also worth speaking to your landlord to see if they would be willing to offer some flexibility around this if needed, either with some form of rental holiday or by allowing you to pay rent on a monthly basis to allow time to apply for some of the support referred to above.
4. If you have large customers, then discuss with them whether they can potentially bring forward payments which would otherwise be due at a later date to help your cash-flow. For example the supermarket chain Morrisons recently announced it would pay its small suppliers instantly (rather than on the usual, depending on the turnover of the supplier, 14-60 day payment terms) to help keep them, and therefore its supply chain secure.
5. The news from insurance companies is less welcome with many insurance companies saying business interruption insurance does not apply in the current circumstances due to pandemics, a common exclusion within insurance cover. However, some policies may cover closure due to notifiable diseases (of which Covid-19 is now a notifiable disease since legislation was passed to that effect on the 5^th March 2020). It is worth speaking to insurance brokers to see what cover you may have. For example, some key man insurance policies may pay out of a key employee is unable to work in the business due to Covid-19. Additionally, if you have had to cancel events you may have some form of abandonment or cancellation cover that can be called upon. It is also worth checking liability insurance to see if you are covered again claims from employees, customers and member of the public relating to Covid-19.
6. The Business Rates Retail Discount in England for the tax year 2020/2021 will be increased to 100% for properties with a rateable value of less than £51,000. This will also be extended to those businesses in the leisure and hospitality sector. Eligible businesses will need to apply to their local authority to receive the discount.
7. Each small business that pays little or no business rates due to eligibility under Small Business Rate Relief (SBRR) or Rural Rate Relief is entitled to a one-off grant of £10,000 (increased yesterday to this amount from £3,000) to help meet ongoing business costs. This will apply from early April onwards and eligible businesses should be contacted direct by their local authority in relation to this.
8. If you are in the retail, hospitality and leisure sector operating from smaller premises with a rateable value over £15,000 but below £51,000 then you may also be eligible for a further grant of £25,000.
9. It was announced that a temporary Coronavirus Business Interruption Loan Scheme delivered by the British Business Bank will launch in a matter of weeks to provide businesses with access to bank lending and overdrafts. Under this scheme the government will provide lenders with an 80% guarantee on each loan (subject to a per-lender cap on claims) intended to give lenders further confidence in continuing to provide finance to SMEs. The maximum loan value will be £5m (up from the £1.2 million maximum previously announced in the recent budget) and the new guarantee will initially support total loans of up to £1billion. These loans are interest free for the first 6 months and there should be no charges charged by lenders for putting these in place. More detail on this will of course follow shortly but the announcement offers significant encouragement for cash flow planning.
10. HMRC have extended their Time To Pay service where HMRC may be willing to grant time to pay tax liabilities otherwise due to HMRC. HMRC have a dedicated hotline for this which can be contacted on 0800 0159 559.

Should you need any help, please do not hesitate to contact the team at Gorvins Solicitors and we would be more than happy to help guide you through these highly unusual but worrying times.

(Information correct as per announcements made up to and including 17^th March 2020)